Roy Lumbe @PeopleDailyKe
Public service vehicle (PSV) operators are going to have to hike fares following the move by the government to levy 16 per cent Value Added Tax (VAT) on fuel products beginning next month, the Matatu Owners Association has said.
According to the chairman Simon Kimutai (pictured), the government ought to be harsher on tax evaders in order to collect more revenue instead of taxing fuel products.
“Commuters will have to bare with the high fare prices when the levy takes effect next month, the government should focus on being ruthless to tax evaders than taxing this crucial commodity,” said Kimutai.
In 2013 the government introduced 16 per cent vat on fuel products but the same was put on hold for three years in order to prepare consumers.
In 2016 the grace period was extended by two years.
Kimutai says that although the additional fares are painful to commuters, the same has to take effect because taxation of fuel translates to an added cost to PSV operators.
He said that the increased fares, though reasonable, will be based on calculation of the additional cost.
“For town service fare increment will be between Sh10 and Sh20 based on the distance, “ he added.